Hargeisa, Somaliland – The Central Bank of the Republic of Somaliland has officially inaugurated a transformative new legal framework for the nation’s financial sector: the Banking and Financial Institutions Collateral Law (Law No. 110/2025). This comprehensive legislation establishes clear and robust mechanisms for collateral and enforcement, marking a significant milestone in the country’s economic development.
The launch ceremony was attended by high-ranking officials, including Central Bank Governor Abdinasir Ahmed Hirsi, Deputy Governor Hamse Abdirahman Khaire, Minister of Finance, Minister of Commerce and Tourism Abdurahman Hassan Nur, the Chairman of the Chamber of Commerce, representatives from private banks, Parliament, and the judiciary.
Having been approved by both the House of Elders (Guurti) and the House of Representatives and subsequently signed by the President, the law is now fully operational across Somaliland.
In his keynote address, Governor Abdinasir Ahmed Hirsi framed the legislation as a balanced and complete framework designed to protect the rights of all parties. “This law is a comprehensive instrument that safeguards both the creditor and the debtor,” he stated. He emphasized that by setting transparent and equitable rules for securing and recovering loans, the Act will stimulate commercial investment and domestic financing.
Deputy Governor Hamse Abdirahman Khaire highlighted the collaborative effort behind the law’s development, noting extensive consultations with private banks, parliamentary bodies, and the judiciary over an extended period. “This partnership has been crucial for advancing our financial system and building a reliable, efficient framework that fosters confidence,” he said.
Minister of Commerce and Tourism Abdurahman Hassan Nur pointed to the law’s role in improving Somaliland’s investment climate. “The presence of such modern, ready-to-implement legislation is a powerful incentive for international investors,” he noted. He added that enhanced access to secured lending will be particularly transformative for small and medium-sized enterprises (SMEs), driving broader economic growth.
The Chairman of Somaliland’s private banks celebrated the achievement as a testament to national capability, noting that the law was entirely developed and finalized by domestic institutions without foreign technical assistance. “This is a great victory—a law conceived, drafted, and implemented by our own experts, demonstrating our self-reliance,” he declared.
Widely seen as a cornerstone for modernizing the financial sector, the new law is expected to provide greater legal certainty in lending, strengthen trust in the banking system, and support sustainable economic development in alignment with Somaliland’s Islamic finance principles.
The Central Bank affirmed that this legal framework and its enforcement system will be instrumental in promoting financial inclusion and stability in the years ahead
